Xin Lang Cai Jing·2026-02-07 07:35Core Viewpoint - Hongkang Life Insurance reduced its stake in Zhengzhou Bank H-shares, selling 12.17 million shares at a price of 1.359 HKD per share, totaling approximately 16.54 million HKD. After the sale, Hongkang Life holds 415 million shares, reducing its ownership from over 22% to 20.56%, while still remaining a significant institutional shareholder. This reduction is seen as a response to liquidity pressures and a cautious reassessment of Zhengzhou Bank's low dividends, unstable governance, and weak asset quality [1][18]. Group 1: Hongkang Life's Shareholding Activities - Hongkang Life's investment in Zhengzhou Bank H-shares began in mid-2025, with a series of purchases that triggered multiple disclosures. The first purchase was on June 27, acquiring 16 million shares at 1.2068 HKD each, increasing its stake to 5.55%. Subsequent purchases continued through July and August, with the total investment exceeding 400 million HKD and an average purchase price between 1.18 and 1.43 HKD [1][19][2]. - By the end of Q3 2025, Hongkang Life had accumulated approximately 447 million shares, representing 22.14% of the total H-share capital, making it one of the largest institutional shareholders [1][19]. Group 2: Financial Performance of Hongkang Life - Hongkang Life's net profit was approximately 1.76 billion CNY in 2019, but it faced a decline from 2020 to 2022 due to regulatory changes affecting dividend insurance. The company began to recover, with net profit reaching 4.60 billion CNY by the end of 2025 [2][24]. - The insurance business revenue for 2025 was about 72.25 billion CNY, a slight decrease from 75.11 billion CNY in 2024, indicating a shift from financial products to protection-type insurance [8][25]. Group 3: Zhengzhou Bank's Governance and Financial Health - Zhengzhou Bank, established in 1996 and listed in 2015, has faced significant management turnover in 2025, with multiple executives resigning, leading to concerns about stability and continuity in operations [11][28]. - As of Q3 2025, Zhengzhou Bank reported total assets of approximately 743.6 billion CNY, with a year-on-year growth of 9.93%. However, the bank's net interest margin remains under pressure, and its profitability growth is below industry averages [11][28]. - The bank's non-performing loan ratio was 1.76% as of Q3 2025, which, while showing a slight decline, remains significantly higher than the average for listed city commercial banks [14][29]. Group 4: Dividend Policy Controversies - Zhengzhou Bank's dividend policy has been a contentious issue, with a history of low and inconsistent dividends that diverge from industry norms. The bank did not implement cash dividends for several years until 2024, when it reinstated dividends at a low rate of 9.69% of net profit, far below the industry average of over 30% [16][32]. - The bank's governance structure has led to conflicts between A-share and H-share shareholders, particularly regarding dividend proposals, with significant opposition from H-share investors [16][33].